S&P 500 Dips From Record Closing High As Focus Shifts To Fed Meet

S&P 500 Dips From Record Closing High As Focus Shifts To Fed Meet

The S&P 500 and the Dow eased on Monday, a day after the S&P 500 hit a record closing high, as investors awaited cues from the Federal Reserve’s meeting this week on the central bank’s outlook on inflation and the future of bond purchases.

The technology-heavy Nasdaq (.IXIC) rose for the sixth time in the past seven sessions, lifted by gains in shares of Tesla Inc (TSLA.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O).

Recent data has indicated that the U.S. economy is regaining momentum but not overheating, taming worries about inflation and sending the S&P 500 (.SPX) to an all-time high.

While the Fed has reassured that any spike in inflation would be transitory, policymakers could begin discussing the tapering of bond buying at the Tuesday-Wednesday meeting. Most analysts, however, don’t expect a decision before the central bank’s annual Jackson Hole, Wyoming, conference in August.

Any shift in the Fed’s dovish rhetoric could upend equity markets. The benchmark has climbed 13% this year while the Dow (.DJI) and the Nasdaq (.IXIC) have risen 12.6% and 9.2%, respectively.

“The market is looking for the Fed to not be dramatically alarmed about fears of inflation, or move too soon with tapering,” said Thomas Hayes, chairman and managing member of Great Hill Capital LLC in New York.

“For this market to push higher, tech has to start to perform.”

High-growth tech-related stocks, which were at the heart of a selloff driven by fears of rising rates, have regained their footing this month at the expense of economy-linked industrials (.SPLRCI), financials (.SPSY) and materials (.SPLRCM) stocks.

Healthcare (.SPXHC) and financials were the biggest drag on the S&P 500 on Monday, while technology (.SPLRCT) and consumer discretionary (.SPLRCD) provided the biggest boost.

At 10:00 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 140.86 points, or 0.41%, to 34,338.74, the S&P 500 (.SPX) lost 6.36 points, or 0.14%, to 4,241.34 and the Nasdaq Composite (.IXIC) gained 40.35 points, or 0.29%, to 14,109.77.

Lordstown Motors Corp (RIDE.O) tumbled 20.8% after it said Chief Executive Steve Burns and Chief Financial Officer Julio Rodriguez have resigned, days after the electric-truck maker warned that it may not have enough cash to stay in business over the next year.

Energy stocks (.SPNY) added 0.6% as crude prices hit their highest levels in more than two years.

Tesla gained 1.4% after CEO Elon Musk tweeted on Sunday that the electric carmarker will resume allowing bitcoin transactions when miners who verify transactions use more renewable energy.

Advancing issues outnumbered decliners by a 1.1-to-1 ratio on the NYSE and a 1.2-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and no new low, while the Nasdaq recorded 136 new highs and seven new lows.



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